Walkout, shutdown at ports rippled through the entire supply chain

By Karen Robes Meeks Staff Writer

Posted:
12/05/2012 08:46:22 PM PST

Updated:
12/06/2012 08:29:55 AM PST

LONG BEACH, CALIF. USA -- Martha Martinez signals to the crane operator above as she guides a container on to a truck at Long Beach Container Terminal in the Port of Long Beach (Calif.) on December 5, 2012.
Photo by Jeff Gritchen / Staff Photographer (Jeff Gritchen)

LONG BEACH, CALIF. USA -- Containers at Long Beach Container Terminal in the Port of Long Beach (Calif.) on December 5, 2012.
Photo by Jeff Gritchen / Staff Photographer (Jeff Gritchen)

For many, the weeklong clerical workers strike did more than shut down two-thirds of the ports of Los Angeles and Long Beach, the nation's busiest seaport complex.

More than 40 miles away from the picket line, truck drivers at Genesis Intermodal Delivery's West Coast operations in Pomona were unable to do their jobs until Wednesday after the strike was resolved.

"It put some drivers out of work because we didn't even have enough work to keep them busy," said general manager Mark Adams.

Meanwhile, some vendors continued to wait for goods stuck on container vessels.

"My customers are calling because their ships (are) still out on the bay," said Brenda Donelan, an agent for Mason Dixon Intermodal.

Although the true economic impact of the strike has not yet been fully realized, port officials are estimating the potential loss to both ports is anywhere from $110 million to $540 million a day.

This is lower than the roughly $1 billion being estimated by some economists and other industry observers, based on the $350 billion worth of goods handled annually by both ports.

That's because the $1 billion number applies to a loss from a complete shutdown of both ports, but since four of the 14 terminals remained open, those terminals took on a lot of the goods overflow and somewhat curbed the daily economic loss, said Port of Long Beach spokesman Daniel Yi.

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The ports could recoup some of that loss now that the goods are free to move through the ports, but if some products, such as perishable goods, sat idle longer, the loss would be harder to recover, Yi said.

"There is going to be some economic losses to the port administration," said Geraldine Knatz, executive director of the Port of Los Angeles. "There is cargo that has been diverted that won't come back. There were fees associated with that. Our hope is that because the strike ended, we were able to get everyone back to work so fast that we were able to minimize those economic losses. We have people who lost a week's pay. Those types of things will have ripple effects."

Christopher Lytle, executive director of the Port of Long Beach, said the quick resolution helped to stop further losses.

"If it had gone on longer, it would have been tougher to dig out, but as of right now with the ships we have and the backlog of ships at anchor and at berth, we'll be fine," he said. "I don't think we'll lose a lot of our market share."

The strike's effect was felt in nearly every part of the supply chain, from the roughly 5,000 International Longshore and Warehouse Union dockworkers who chose to respect the picket lines to railyard workers who didn't work because trains were not moving goods.

Union Pacific issued an embargo for all international traffic destined for its International Container Transfer Facility at Long Beach, and all "on dock" locations at both Los Angeles and Long Beach, with the exception of TraPac, Pier A and PCT terminals, said spokesman Aaron Hunt.

The impact of the strike reverberated nationally, affecting everyone from families unable to retrieve their furniture and other personal belongings after relocation to a Kentucky auto assembly line that may soon run out of parts, Yi said.

About 60 percent of container cargo flowing through the two ports is destined to points outside of Southern California, much of it to warehouses in Chicago, he said.

Yi added that about 40 percent of the nation's auto parts come through the Long Beach and Los Angeles ports.

Port of Long Beach officials have been getting calls from vendors about the state of their shipments since the strike began, including movie rental company Red Box, which is expecting a shipment of parts that maintains its kiosks, Yi said.

About $650 million worth of electronics, apparel and other goods were sitting idle at the seaport complex, Yi said.

Although hauling goods to and from the ports isn't the most important part of Genesis Intermodal's business, the work stoppage at the ports prevented the firm from returning some empty containers to Los Angeles and Long Beach, according to Adams.

Other delays for transportation firms across the lengths of supply chains could mean shipments to the East Coast could be delayed one week, Adams said.

It may take as many as two weeks for goods-movers to return to a normal pace of business, according to President Richard Bartolic of American Pacific, a Chino-based trucking firm.

Like Adams, Bartolic said the strike prevented some truckers from earning their usual income.

For the most part, Bartolic said economic disruptions from the strike would likely be concentrated among those who make their living moving goods.

"I think it's probably more relegated to the industry itself. Certainly, there may be some retailers that don't have goods on the shelves in time for Christmas," he said.

The last time the twin ports experienced a shutdown of this magnitude was a decade ago, when the ports of Long Beach and Los Angeles were among the 29 West Coast ports shuttered in 2002 because of a 10-day lockout imposed by the shippers' group Pacific Maritime Association.

The move at the time was in response to what they perceived as an organized work slowdown by the union, which the union denied.

The October 2002 shutdown nearly delayed the delivery of holiday toys and goods to store shelves throughout the United States. Some factories halted operations for lack of supplies, and vendors had to scramble for alternate suppliers.

This time, the San Pedro Bay-centered strike forced companies to redirect dozens of container ships to Mexico, Panama and Oakland, which received most of the diverted vessels. At least a dozen more remained at anchor, waiting out the strike to enter the ports.

About 40 percent of the ports' cargo is bound for Southern California, Yi said.

"This stoppage hurts Southern California the most," he said.

Trucks line up on Pier J Avenue as they wait to get in to Cosco, as other ships are parked in the Port of Long Beach on December 3, 2012. Cosco was one of the few terminals open during the clerical workers strike.
Photo by Jeff Gritchen / Staff Photographer (Jeff Gritchen / Staff Photographer)